The value of commercial property investment exceeds €2bn so far this year 

It marks the strongest performance for the sector since 2022

Director of investment at Savills Ireland Kevin McMahon said the 'most significant feature of the market this year has been the return of larger transactions'. File picture: Eddie O'Hare

Despite a slight fall in the value of investment in commercial property between July and September, total investment in the sector so far this year has exceeded €2bn — marking the strongest performance for the period since 2022, new data from estate agent Savills Ireland shows.

Between July and September, a total of 20 commercial investment transactions were completed worth a combined value of €649m — down 6.5% compared to the same quarter last year. However, the size of the average deal rose from €20m to €32m.

The largest transaction during the third quarter was the €180m acquisition of Quayside Quarter in Dublin’s North Docklands by Quantum Immobilien from Greystar. The 268-unit residential scheme represents Quantum Immobilien’s first investment in Ireland.

This was followed by BNY Mellon’s €160m acquisition of The Shipping Office in Dublin 2.

Director of investment at Savills Ireland Kevin McMahon said the “most significant feature of the market this year has been the return of larger transactions”.

“We have now passed €2bn for the first nine months of the year, but just as importantly, the average deal size increased by 60% in the third quarter. There is clearly capital available for good Irish assets, and we are seeing that across all sectors rather than in one part of the market alone.” 

The residential sector was the second largest sector during the quarter, accounting for 39% of the total investment during the period. This was followed by offices, which represented 29% of the total, and logistics at 25%.

Retail represented 6% of activity, with mixed-use assets accounting for the remaining 1%.

According to Savills, the buyers from the US and other European countries accounted for the “vast majority” of the investment during the third quarter.

US investors accounted for 47% of investment volumes — their highest quarterly share since the second quarter of 2016 — while European investors represented a further 39%.

“We have a good pipeline of transactions moving through the market and, on that basis, we expect investment volumes to reach approximately €3bn by year-end,” Mr McMahon said.

“Financing conditions have become more challenging again, however, so pricing, asset quality and stable cashflow growth will remain important as we move into the final quarter.” 

Savills Ireland said institutional capital continued to dominate the market, accounting for 63% of purchases and four of the five largest transactions during the quarter.

In terms of sellers, private equity firms accounted for 53% of disposals during the most recent quarter, followed by property companies at 34%. Institutional investors represented just 4% of sales, their lowest proportion since the fourth quarter of 2023.